Home / Knowledge / News / Textiles / NY Cotton Futures continues to lose ground this week
NY Cotton Futures continues to lose ground this week
19
Jul '14
Over the last ten-and-a-half weeks relentless spec and trade selling has pushed the December contract nearly 1700 points lower and it still remains to be seen where this decline ultimately leads to. From a technical perspective we are now approaching the June 2012 low of 66.10 on the weekly chart and beyond that we’ll have to go all the way back to October 2009 to find lower prices. 
 
However, there is a glimmer of hope that we might at least get a rebound in the next week or two, since the market has been able to move sideways over the last five sessions, holding the low of 67.10 cents that was posted right after the release of the USDA report on July 11. 
 
Although the USDA report offered plenty of shock value with its projection of 105.68 million bales in global ending stocks, the market is currently trading only slightly below its pre-report level, indicating that the brunt of the bearish news has already been discounted.
 
Taking a deeper look into the USDA numbers, one could even conclude that the market has been a bit too pessimistic lately. For example, the projected ROW surplus of 12.1 million bales in the coming season would actually be the lowest in four years. By comparison, in 2011/12 the ROW surplus amounted to over 27 million bales and in 2012/13 it was still over 17 million bales. 
 
The reason the market is so bearish at the moment despite this relatively low ROW surplus is that China is not expected to absorb it to the degree it has in the past. Over the last 3 seasons the ROW surplus amounted to a combined 57.1 million bales and China imported a total of 58.4 million bales, absorbing the entire ROW surplus as well as some stocks.
 
This is not likely to happen again this season, as China is currently expected to import only 8.0 million of the 12.1 million bales the ROW produces in excess, which will result in ROW stocks growing by 3.75 million bales according to the USDA, from 39.67 million at the end of this season to 43.42 million at the end of 2014/15. 
 
Considering that ROW ending stocks have been relatively tight in recent years, to the point that there was hardly any available cotton left at the end of summer, does a 3.75 million increase change the situation so dramatically that prices have to fall into an abyss?

Must ReadView All

Courtesy: Bruckner

Textiles | On 3rd Dec 2016

Indian textile companies opt for Brückner stenter lines

Indian textile firms Laxmipati Sarees, makers of polyester sarees and ...

Textiles | On 2nd Dec 2016

Indian currency crisis impacts global cotton market

The currency crisis in India, marked by insufficient supply of new...

Huang Wei from Fiber Raw Material Dept of Sinopec Chemical Commercial Holding speaking at the Forum

Textiles | On 2nd Dec 2016

Huge potential for nylon consumption: Experts

There is huge potential for increase in nylon consumption said...

Interviews View All

Vasanth Kumar
Max Fashion India

‘Traditional high-street retailers are now willing to offer franchisees to ...

Shawn Honeycutt
Bolger & O'Hearn

‘The Indian market is interesting and rather persistent in seeking new...

Binoy Ravjani
Hero's Fashion

‘One of the recent trends in hand block printing is the indigo process,...

Kevin Nelson
TissueGen

Kevin Nelson, Chief Scientific Officer, TissueGen discusses the growing...

Eamonn Tighe
Nature Works LLC

Eamonn Tighe, Fibres and Nonwovens - Business Development Manager of...

Suresh Patel
Sidwin Fabric

Sidwin Fabric is a manufacturer and exporter of polypropylene textiles and ...

Mike Hoffman
Gildan Activewear SRL

Gildan Activewear, a manufacturer and marketer of branded clothing and...

Wendell Rodricks
Wendell Rodricks

"We should not compare India and the West. There are things we do that...

Robert Brunner
Devereux

Golfwear and menswear brand Devereux is set for greener pastures. Robert...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH
December 2016

December 2016

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

SUBSCRIBE


Browse Our Archives

GO


Advanced Search